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[October21]Workshop:The Cleansing Effect of Minimum wages: Minimum wages, firm dynamics and aggregate productivity in China


Seminar on International Economics (10.21)

Time:Oct 21,2013(Tue.) 10:30-12:00

Location: National School of Development / China Center for Economic Research 512

Chair:Miaojie Yu

Sperker:Poncet Sandra, University of Paris 1

Topic:The Cleansing Effect of Minimum wages: Minimum wages, firm dynamics and aggregate productivity in China

Abstract:We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For the surviving firms, thanks to significant productivity gains, wage costs rose without any negative employment effect. At the city-level, our results show that higher minimum wages affected aggregate productivity growth via both productivity growth in incumbent firms and the net entry of more productive firms. Hence, in a fast-growing economy like China, there is a cleansing effect of labor-market standards.

Speaker Introduction:Poncet Sandra is a professor of Economics in the University of Paris 1, a researcher of Paris School of Economics and a scientific advisor of CEPII. She obtained her Ph.D. degree from the Clermont-Ferrand University in France. She is interested in International Economics, Development Economics, Spatial Economics, Applied Econometrics, and Chinese Economy. Currently, she has published several papers on the Review of Economics and Statistics, European Economic Review, Review of International Economics, World Bank Economic Review, Journal of Development Economics, China Economic Review, The World Economy, Journal of Comparative Economics, Journal of Environmental Economics and Management and et al..

CV_ Sandra Poncet.pdf

The cleansing effect of minimum wages minimum wages, firm dynamics and aggregate productivity in China.pdf